Data issued by the Central Bank said yesterday that residents in the state saved deposits in local banks during the month of April alone, at a value of 26.7 billion dirhams, while non-residents withdrew 6.4 billion dirhams, so that the net increase in bank deposits becomes 20.3 billion dirhams.
Safe haven
For his part, the banking expert, Ahmed Youssef, said that "banks are a safe haven for funds in times of crisis, and the market trends are not clear, so many individuals prefer to go to this option," stressing that "the spread of the Corona virus created a state of fear from Market volatility and instability, so most dealers prefer to keep cache and not risk, despite the existence of great investment opportunities in the stock market, as well as bonds, due to price declines. He added, "Some dealers' lack of experience pushes them towards bank deposits, as they are safer at the present time and without risk."
Investment mitigation
And Youssef continued, "Many investors have reduced their investments by selling shares, bonds or assets, whose prices are currently fluctuating, in exchange for obtaining cash that was kept in banks in the form of deposits."
He indicated that the interest rates on deposits differ according to the value of the amount and the duration, but in general there is a decrease in the return on bank deposits, for example for a six-month period that runs between 1.25 and 1.75%, indicating that the most important thing for money holders at the present time is to keep them in a container Safe, out of risk, not return on investment.
Youssef added that the reputation of the banking sector in the state and the protection of deposits make there great confidence among the owners of capital in general, whether they are inside or outside the country. Noting that the global market conditions and unprecedented changes that made the citizen and the resident prefer to keep his money inside Local banks.
Cash in circulation
According to the «Central» data, the money supply (N1), which includes cash circulating outside the banks, in addition to cash deposits (current accounts and demand accounts with banks) increased by 3.2% from 542.7 billion dirhams at the end of last March, to 560.3 billion dirhams in End of last April.
The money supply (N2), which includes (N1), along with semi-cash deposits (term deposits, savings deposits for residents in dirhams, and deposits of residents in foreign currencies) increased by 0.7% from one trillion and 454.9 billion dirhams at the end of March, to one trillion and 464.8 billion dirhams At the end of last April.
The money supply increased (N3) and included (N2), along with government deposits with banks operating in the Emirates, as well as with the Central Bank. By 2.2% from one trillion and 714.1 billion dirhams at the end of March, to one trillion and 751.5 billion dirhams at the end of last April.
The Central Bank attributed the increase in the money supply (N1) to an increase of 4.7 billion dirhams in cash circulating outside the banks, and to an increase in cash deposits by 12.9 billion dirhams, as well as an increase in the money supply (N2) as a result of an increase in the money supply (N1) despite a decrease by 7.7 billion dirhams in semi-cash deposits. While the increase in the money supply (N3) is due to an increase in the money supply (N1) and (N2), and an increase in government deposits by 27.5 billion dirhams.
Banking assets
Central bank data showed that total banking assets, including bank acceptances, increased by 0.9% from three trillion and 128 billion dirhams at the end of March to three trillion and 155.7 billion dirhams at the end of last April.
Total bank credit increased by 0.4% from one trillion and 768.2 billion dirhams at the end of March, to one trillion and 776.1 billion dirhams at the end of last April.